SK hynix: Memory Is Cyclical, This Probably Hasn't Sold Off Enough Yet

SK hynix Inc. surged over 500% on the Korean exchange before its U.S. IPO; it has been selling off by dramatic percentages more recently. AI-driven DRAM demand has fueled SKHY's earnings, but accounts receivable are rising much faster than sales, and buyers are beginning to look for cheaper alternatives. SKHY trades at low multiples versus sector averages, yet cyclicality makes this a potential value trap. I rate SKHY a Hold, because it's a classic case of the "cyclical in a massive uptrend at a low P/E ratio" value trap. The only reason I'm not rating SKHY a Sell is that substantial selling has already occurred. I wouldn't be surprised if a near-term bottom is hit soon.

SK hynix Inc. ( SKHY ) recently stumbled after a widely anticipated IPO, suffering several days of 8%-9% declines (while remaining ahead of the listing price ). It was a rough start